Wolfspeed is reportedly preparing to file for bankruptcy within weeks due to fierce competition from fast-growing Chinese rivals and weak demand in the industrial and automotive markets.
This is according to the Wall Street Journal and Reuters. The US chip company is struggling with debt of around $6.5 billion and is also facing ongoing uncertainty surrounding import tariffs. This is putting further pressure on Wolfspeed, which is already under heavy financial strain.
At the end of March, the company announced in a press release that it was exploring alternatives for its convertible bonds and was in talks with lenders, including Apollo and Renesas.
With those talks now having failed, Wolfspeed is reportedly preparing to file for bankruptcy protection under Chapter 11, with the support of most of its creditors, after rejecting several out-of-court restructuring proposals.
The silicon carbide chip manufacturer recently warned of the risk that it would not be able to continue its operations and lowered its revenue forecast for 2026 to $850 million. This was significantly lower than the $958.7 million expected by analysts.
Wolfspeed tried to recover but ultimately stumbled. In November 2024, due to disappointing demand for electric vehicles and a sluggish industrial market, the company announced a 20% layoff and multiple plant closures.
In early 2025, the company closed several locations and moved its device division to a 200mm silicon carbide factory to improve efficiency and scale up production, according to Reuters.
Competition from China
Fierce competition from China could further exacerbate the situation. A February report by Nikkei highlighted China’s aggressive advance in mature chips and niche substrates, causing prices to plummet to record lows. Wolfspeed’s 6-inch silicon carbide wafers once sold for $1,500 each—now Chinese competitors are offering them for as little as $500 or less, according to the report.
According to the latest research from TrendForce, Wolfspeed still had a 33.7% market share in the SiC substrate market in 2024. But Chinese rivals TanKeBlue and SICC quickly climbed to 17.3% and 17.1%, respectively, taking second and third place.
According to TrendForce, increased competition and sharp price declines will cause global revenue from N-type SiC substrates to fall by 9% to $1.04 billion in 2024. Looking ahead to 2025, the SiC substrate market will continue to face both weak demand and oversupply.